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Settlement – entire agreement Print
Most of us are familiar with entire agreement clauses in the context of commercial contracts. In essence, an entire agreement clause is an attempt to exclude any future claim based on statements made during negotiations.

Litigators should also not overlook the usefulness of entire agreement clauses. They can be of great assistance when settling a dispute especially when the dispute has been acrimonious or reached after prolonged negotiations. This was illustrated by a recent case involving an agreement after a protracted mediation. The settlement agreement contained an entire agreement clause that was designed to prevent claims arising from representations or statements made during the negotiations. It said the settlement agreement constituted the entire agreement between the parties; that the parties had not relied on any oral or written statement or representations made during the course of negotiations (other than those recorded in the agreement). It added that there would be no right in relation to any statement or representation, unless such statements or representations were made fraudulently. Subsequently, one of the parties announced that it would not be held by the agreement, on the basis that fraudulent representations had been made – although the allegations of fraud were subsequently dropped. What emerged, at the end of the day, was fairly predictable: in the absence of proving fraud, it would not be possible to set the agreement aside. Negligent misrepresentations are not enough to thwart the operation of an entire agreement clause. Having an entire agreement clause is reasonable in such circumstances and accordingly it will be enforceable. Crystal Decisions v Vedatech [2007] EWHC 1062 (Ch) discussed in [2007] The In-House Lawyer July/August p39. © Practical Lawyer

September 2007
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